Finding All Pure-Strategy Equilibria in Static and Dynamic Games with Continuous Strategies

Kenneth Judd, Philipp Renner and Karl Schmedders
Additional contact information
Karl Schmedders: Unviersity of Zurich and Swiss Finance Institute

No 10-45, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Static and dynamic games are important tools for the analysis of strategic interactions among economic agents and have found many applications in economics. In many games equilibria can be described as solutions of polynomial equations. In this paper we describe state-of-the-art techniques for finding all solutions of polynomial systems of equations and illustrate these techniques by computing all equilibria of both static and dynamic games with continuous strategies. We compute the equilibrium manifold for a Bertrand pricing game in which the number of equilibria changes with the market size. Moreover, we apply these techniques to two stochastic dynamic games of industry competition and check for equilibrium uniqueness. Our examples show that the all-solution methods can be applied to a wide variety of policy-relevant models.

Keywords: Polynomial equations; multiple equilibria; static games; dynamic games; Markov-perfect equilibria (search for similar items in EconPapers)
JEL-codes: C63 C73 L13 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2010-11
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ssrn.com/abstract=1703417 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1045

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().